Veolia Environnement SA (VIE) Earnings Call Transcript & Summary

Good morning, everyone, and thank you for joining us for this conference call to present how Veolia's multifaceted performance contributes to value creation. After my introduction, where I will present not only our 2024 results, but our ambitions as well, both on the financial and nonfinancial performance, I will go through with the team here 3 pillars of our strategy, starting with Decarbonization, which will be addressed by Emmanuelle Menning, our CFO; Depollution and Regeneration, which will be commented by Sebastien Daziano, our Head of Strategy and Innovation; as well as Isabelle Quainon, our Human Resources Director, who will present the social achievements and targets of our Multifaceted Performance. As you know, in Veolia, we measure success not only on the financial, but on the nonfinancial results as well, that's what we call Multifaceted Performance. I will start by commenting in a few minutes the financial results, which you -- have already been released in -- a few weeks ago. They were very good, starting with topline growth, plus 5%, which is a lot higher than a few years. As you know, Veolia used to grow more than like 2%. Now we're 5% growth year-on-year. And if I look at the growth booster, it's even plus 6.6%, which is really a big achievement, which is associated with the launch of our GreenUp strategic plan. EBITDA increased by plus 5.8% at the high end of our guidance, and EBITDA margin grew by 80 basis points. Current net income grew by 14.6% and EPS by 12.4% to EUR 2.13. The leverage ratio was below our target, which is good with 2.63x. So all those were very, very strong results financially speaking in a rather challenging environment, thanks to our unique positioning as well as our agility in delivering all our objectives and specifically our efficiency program. And our 2025 targets and guidance is very ambitious as well, and we've raised our synergy targets. Going now through the nonfinancial performance. As you know, and I've just alluded to in my introduction word, we measure success on 15 KPIs, the multifaceted performance, 4 of them being financial, 11 of them being nonfinancial across all the stakeholders, which is exactly what's put on this slide with the various colors. And this is really embedded into the way I manage the company with year-on-year targets on every single of those 15 objectives, again, the 11 and the 4 year-on-year and for the Green Up 2027 target as well. So all is really embedded. And that's exactly what's put on this slide. Green Up 2027, we want to achieve 10% net income growth on average per year as well as increase the CO2 we erased to our customer by 30%, save 1.5 billion cubic meter of freshwater and treat 9 million tonnes of hazardous waste, which is as many of pollutants we remove, therefore, protecting human health. If I start with the 2024 result of our multifaceted performance on the nonfinancial indicators, our mental objectives were all met. I won't mention all the figures. You will see them on this slide, but 1.45 billion cubic meter of water saved. Scope 1 and 2 emission decreased by 14.5%, so our decarbonization plan is on schedule with EUR 133 million spent to exit coal and reduce methane. And we've achieved as well 73% of biodiversity preservation on all our sensitive sites. Commercial target, which is, of course, one of our other stakeholders, were very good. I would -- I was mentioning already the plus 6.6% growth on our growth boosters, which I'm very happy, exactly in the range we anticipated for GreenUp, which is mid- to high single digits. And I could mention as well the Net Promoter Score of 55, which is a super, super good achievement for a B2B company like we are as well as Scope 4, which we would come back on in a minute, which is the measure of the CO2, we erased, thanks to our service, from our customers' profile of emission. Human resource achievement was very good. And as you know, I really am a strong believer that our employees are force for good and for the success of the company. We reached 88% of employee engagement, which is a very, very high level and well above all benchmark and a good testimony that the Suez merger was really a success, not only on the financial grounds, but actually in the hearts and minds. Finally, and importantly, as well, health and safety, where we have reduced year-on-year our frequency rate, which has improved again in '24 to 4.3. And in terms of social impact of more than 8 million inhabitants benefited from our service to inclusive access for essential services, while ethics and conformity awareness reached a record high in 2024. A slide now on governance because this is all well and good to have this target for the entire company, but there is something which I really count on and which is very key for me, which is that it is embedded within the company. Just 1 example, it's 16,000 employees, which have part of their variable pay, which is driven by exactly achieving on those objectives. So it's not only a few people at the head of the company, it's 16,000, which is a force for driving real action in this spectrum. Of course, it goes all back up to the Executive Committee. And every single of the Executive Committee member has a specific KPI on which they have to drive. Emmanuelle is actually the leader for CO2, for instance, of course, in addition of our mission as CFO. And, of course, up to the Board, where we have a purpose committee and governance, which is checking that all that is not only driven from the top, but actually goes down to the entirety of the organization. So alignment is really key for me. In terms of employees, I've alluded to the fact that employees really are a key element of the success of the organization, financially, nonfinancially as well. They are interacting with the customers on a daily basis. That's why we've pushed for increasing employee ownership a few years ago, and this has worked well with employees now owning 9% of Veolia's shares, which make them the largest shareholder of the group. It's, again, a key for success as it aligns the interest of everybody, and it's not only the success of today, but the success of tomorrow and the day after, which we are guaranteeing thanks to that. Of course, if I talk about the financial community, we want to be recognized for everything we do well. And that's why I'm very happy to announce today that Veolia is ready for Green Bonds and Blue Bonds. After an extensive work by the team, we've put forward a state-of-the-art green financing framework, which will enable us to issue Green or Blue Bonds, where the funds will be directly to eligible investment. And, of course, aligned with the EU green taxonomy. Rating agencies, of course, we are very proud of what we do, and we want to ensure that our work is recognized. Just to take first the CO2 trajectory, it was recognized by both SBTi and Moody's in line with 1.5 degrees target, which is, as far as I know, a worldwide first. I'm not talking about well below 2 degrees, but 1.5 degrees, which as you know, is a lot more ambitious. I can talk about all the other rankings on climate, as I said, as well as on biodiversity, where we were an early adapter of the TFND status and act4nature, which have both fully approved our commitments. I will now hand over to Emmanuelle, who will detail our decarbonization strategy and trajectory even more so.

Thank you, Estelle, and good morning, everyone. I will explain how Veolia is going to tackle the biggest environmental challenge of the century, climate change mitigation and adaptation. And you will see that the way we have chosen set us apart, as we are decarbonizing our assets, but also the assets of our clients. Energy transition, water scarcity, extreme weather events urge us to find appropriate solutions. And as Estelle just mentioned, we are uniquely positioned to tackle climate change for our clients. Our business and our environmental impact are interestingly linked so that our services for our customers help them answer these challenges. Let's start with mitigation. Our energy services is or are in the forefront. We are producing electricity and heating from very efficient cogeneration. We maintain, we operate district heating network, which are very efficient and sometimes even more efficient than this centralized system. We provide energy efficiencies to hundreds of clients. And thanks to this expertise, we developed a portfolio of services with concrete and affordable solution. Now let's go to adaptation. Our water services help our clients to adapt. After the very dry summers, in 2022 or after the tragic flood in Spain last year, we are looking at water availability differently. The exposure and the attention of our clients to water scarcity and water issue are significant. And we have the largest portfolio of solutions for them, including reuse or reduction of consumption. And when you look at the organic growth of our services, it increased, what we would call, Scope 4. So the reduction, the erased emission for our clients, thanks to our solutions, I will come back to it. Sustainability is part of our DNA. You have with Veolia, at the same time, financial excellence and environmental leadership. It's even the starting point of our GreenUp Strategy, more euro, less CO2, more fresh water saved. We were very proud to be the first company to obtain the double validation for our climate commitment, which are in line with the 1.5-degree trajectory by SBTi and Moody's. And the numbers speak for themselves. You see our ambition on the slide, minus 50% for Scope 1 and 2 by 2032 plus 50% Scope 4 by 2030 and net zero by 2050. 2 main levers to reduce our Scope 1 and 2 will be our coal exit and methane capture. Now focusing on Scope 1 and 2. On the next slide. We are well on track with our net zero trajectory. We have been able to decrease by 14.5% since 2021, our Scope 1 and 2 emissions. We are very well positioned to reach our 2027 target, which is minus 18%. We are demonstrating that Veolia can reconcile profitable growth and sustainable development. You have, at the same time, profitability and sustainability. We know what we want to do, to reach 12.2 million tonnes in 2032. For instance, in energy, we will pursue our coal exit. In waste, we'll do the methane capture. And in water, we will reduce the carbon intensity of our energy needs. With the implementation of the CSRD in 2024, we had to restate the allocation of our emission. We did a thorough review, in line with the GHG protocol definition and CSRD contract by contract to see for which assets do we have the operational control and for which assets we do not have the operational control following the GHG definition. The noncontrol emissions are coming from our joint venture, our concession and our operating and maintenance contracts, for which we do not own the assets. And we cannot implement on our own a decarbonization plan. Therefore, there are the emission of our clients and are classified in Scope 3 and not in Scope 1 and 2. Of course, we have adjusted our basis line 2021, and let's be sure that it does not change our ambition to decrease Scope 1 and 2 by 50% and Scope 3 by 30% by 2032. You have transparency and compliance. I was mentioning 2 main levers for our Scope 1 and 2 reduction. The first one is the coal exit. 6 years ago, we make a strong management decision, deciding not to take the easy way to sell our coal assets, but to transform them. And we walked the talk, from the EUR 1.6 billion investments, by 2030, we already invest EUR 656 million. And the EUR 656 million are creating value. We have a very strong IRR, above 10%, double digit. In 2030, the revenue from coal will be less than EUR 1, when it was 3% in 2024 and 4% in 2023. We are able to replace coal by biomass and natural gas. For instance, in Germany, in Braunschweig or by biomass and RDF, for instance, in Czech Republic, in Kolin and Prerov, or by natural gas and then later biogas. For instance, in Poznan, in Poland, we will have the innovation at the end of the year. Regarding the next step, our priority is, of course, to deliver with consistency this exit program. And then we will have China, where we are operating in district heating network, for instance, in Arbin -- mainly in Arbin and Montreal, where we do not have alternative source, meaning that there is no viable solution to get rid of coal. We have significantly reduced our carbon intensity, and we will reduce by 25% our emission by 2032. Second lever to reduce our Scope 1 and 2, it's methane capture, which will contribute by 2032 by a reduction of 5 million tonnes. We have an investment plan, EUR 85 million to reduce -- or not, not to reduce, to increase our average capture rate from 60% to 80%. We have already demonstrated our ability to increase from low standard to satisfying level, as we did in Brazil, in Peru from 10% in 2019 to 68% last year. Now coming to Scope 3. For Scope 3, we have a clear ambition to reduce it by 30%. Our plan is clear. On the transfer asset, we will apply our successful recipe with our clients. For instance, methane capture on landfill belonging to our clients in Hong Kong or in Oman or reduce the carbon intensity for the waste arriving in our incinerator, for instance, less plastic or no more plastic. For the remaining part of Scope 3, we will engage our suppliers to reduce their emission and reduce the carbon intensity of the energy we buy to be distributed, 38.9 million tonnes in 2021 increased to 45.8 in 2024 due to scope, mainly in Central Europe and Morocco, and we are targeting 31 million tonnes in 2032. Finally, Scope 4. Scope 4 increased our decarbonization impact. In a simple word, we are saving, we are erasing emission for our clients, thanks to our solution. We are proud to have been able to increase for 13.5 million tonnes to more than 50 million tonnes in 2024, plus 13%. It will grow thanks to our organic growth, for instance, in sorting or in biogas capture to 18 million tonne in 2027. It is our mission to decarbonize the site of our clients whenever they are high or low energy. And now I will hand over to Sebastien, who will speak about our contribution to depollution and regeneration.

Good morning, everyone, and thank you, Emmanuelle. I will now speak about the second pillar of the GreenUp plan, depollution and to have a focus about biodiversity. So, of course, Veolia is a key player in biodiversity protection, the IPBES, so the diversity equivalent of the IPCC, [indiscernible] in French, identifies pollution, climate change and resource depletion as a major human threat to biodiversity. Through our core business activities, Veolia actively works to reduce these pressures and protect nature. For over 160 years, in line with its purpose, Veolia has delivered its solutions with balance, operational performance, environmental preservation and human progress. It is the case, for example, for waste collection and treatment, including hazardous waste to limit the spread of the urban and industrial pollution in salts, in water bodies and in the atmosphere. In 2024, Veolia treated 65 million tonnes of waste, but it is also the case for water and wastewater treatment to ensure clean water to nature, supporting healthy rivers and protecting water resources from pollution. Veolia operates nearly 3,200 wastewater treatment plants in 2024. And in our new contract for drinking water in Veolia France with the SEDIF contract, we showcase a lot of innovation in water treatment technology, including, for example, ultrafiltration and reverse osmosis. We offer here the best service to preserve healthy environment. Everyday, Veolia is part of a virtuous circle protecting the environment from pollution. The group has also made a concrete commitment through GreenUp to treat 9 million tonnes of hazardous waste by 2027. And in 2024, we already reached 8.7 million tonnes, putting us on a very good track to reach this goal. Now have a look on the example of PFAS. So Beyond PFAS offer is a combining offer by Veolia and our approach to PFAS and micropollutant treatment demonstrate how we integrate our water waste and energy expertise to tackle pollution and protect both human health and biodiversity. With our Beyond PFAS solution, Veolia helps industrial and municipal clients tackle PFAS pollution at all stages of the value chain. We test to find PFAS in water and gas, install water treatment system using the best existing technologies, like, for example, membranes, reverse osmosis and activated carbon and safely concentrate, isolate and degrade PFAS through incineration. In 2024, Veolia already generated over EUR 200 million in revenue from the treatment of PFAS, and we plan to accelerate, and the ambition is to reach EUR 1 billion by 2030. But, of course, Veolia is also exemplary in its own operation to limit the impact and to protect biodiversity. Our operations have definitely a positive impact on biodiversity. They help to treat pollution, limit climate change and regenerate resources. And we work continuously to improve this performance to all of our sites. So we protect the nature both of our sites and client locations through a value diversity program with 3 levels of action. The first one, for all of our sites, is 0 pesticide on the target by 2027 of 95% of our sites, and we are today at 70%. Second level for sites with more than 1 hectare of wind space, we implement ecological management and aim for 95% deployment by 2027. And third level for the group, 150 sensitive sites, with high stakes for biodiversity, we put in place a dedicated action plan based on the biodiversity footprint. So Veolia is now part of act4nature International, a French initiative, recognized by Business for Nature. It is a leading global business framework for corporate biodiversity action. And finally, since 2024, Veolia has been part of the early adopter of the TNFD, as Estelle said, the Task Force of Nature Financial Disclosure, and we are one of the first company to have used the TNFD nature impact framework in the URD, the Universal Registration Document. This demonstrate, of course, our dedication and to understanding and managing the business effect and depends on nature while addressing the risk and capturing the opportunities. Now have a look on the third pillar of the strategy, GreenUp plan, regeneration for water and coming from waste. Of course, because the resource is too precious to be used only once, resource regeneration is the 3rd pillar of the GreenUp strategic plan. So starting with water, Veolia is, of course, the world leader in water regeneration in technology and operations, which allows us to address the growing needs of our clients. It is the case, of course, for municipalities, which must respond to growing concern about the quality and availability of water, but it is also the case for industries, which face regulatory constraints and must reduce the pressure on water to maintain the license to operate. We act, of course, along the entire value chain. We bring our best know-how and the expertise to anticipate, detect and repair leaks. For example, in the New Jersey operation, where we serve 1.3 million people with drinking water, we typically have losses of just 13% to 17%, as the U.S. water network typical goes between 30% and 70%. So we over-perform, of course, the leaks in the U.S. We support as well the industries in the implementation and maintenance of zero-liquid discharge solution that clean and reuse water in a closed loop. In the U.S. semiconductor industry, where ultrapure water is essential, we enable manufacturers to recycle 75% of the water consumption. And we support municipalities in the development of water reuse. It is the case in Alicante in Spain, where we manage the whole water cycle of 100% of wastewater using nature-based solution. Strong in the leadership, as Estelle said, we pledge to preserve 1.5 billion cubic meters of freshwater in 2027, and we already avoid 1.45 billion cubic meter in 2024. Last example, regeneration coming from waste, beyond water, we transform a wide range of materials into valuable resources. This Include common recycle levels and specialized materials, such as hybrid plastics and critical metals. We provide end-to-end solutions to transform waste into resources at every stage of the value chain. It is the case from the mining stage, we recover strategic metals using innovative technologies like with lithium extraction. But also at the manuring stage, packaging recyclability and in the sorting center. I will take one key example, the battery recycling industry. It is a growing and regulation-driven market. And we opened one of Europe's first hydrometallurgy plant in Eastern France in early 2025. This is a big innovation facility, and it transformed black mass into reusable metals, like lithium, copper, nickel and cobalt. Through this innovation in battery recycling, Veolia is helping to build a robust European battery recycling industry. Veolia is today to finish #1 in Europe in their circular economy with a turnover of EUR 9.5 billion. And now, Isabelle will present why we care.

Thank you, Sebastien. When we talk about performance at Veolia, there's a dimension that goes beyond traditional metrics. And it's about the profound impact we create in every geography where we operate. As our businesses are not -- cannot be delocalized, we operate locally. We are both a global and a local corporation. Let me share something powerful. We are 218,000 people across 56 countries, but our real reach goes far beyond. For every euro Veolia generates, we create EUR 2.6 in local economies. This translates into more than 1.2 million jobs worldwide, sorry, and that's not just economic value. This is transformative impact at scale. Let's delve into this local anchorage. Think about it. Every second of every day, millions of people depend on essential services that power modern life. This is where resilience meets responsibility. They simply cannot stop. But our mission extends beyond traditional infrastructure. We are committed to ensuring universal access to these essential services. Let me share what it means in practice. In Cambodia's rural areas, in Ecuador's urban communities, we're implementing decentralized water systems to reach population beyond traditional networks. Through innovating solutions like those, we've been helping 8.4 million vulnerable people access services they couldn't reach before. As environmental challenges grow and infrastructure needs evolve, this approach becomes increasingly vital because true resilience isn't just about maintaining services, it's about ensuring they reach everyone who needs them. And our impact goes even deeper, 80% of our spending is local, creating a powerful economic multiplier effect in the communities we serve. And we also developed employee involvement with local charities by creating resources for communities, a civic engagement program. Our Cares program allows every employee to have 1 paid day off every year to support and participate in local charities. When we deliver these essential services to millions of people worldwide, there's one absolute priority that underpins everything, the safety of those who make it possible. In 2024, we achieved powerful progress with a 35% reduction in our frequency rates since 2021, reaching 4.33 this year. But our aim is zero, and this is where we set the bar. To get there, we've built a comprehensive safety framework with 12 nonnegotiable life-saving rules, clear standards for high-risk activities, a culture where every employee is empowered to stop work if they spot a risk. We're speaking isn't just encourage, it is expected, a workplace where all the management chain is engaged and determined to tackle the challenge. So yes, our progress is encouraging, but we won't rest until we achieve our ultimate goal, zero accident, because while we are proud to provide essential services to millions, nothing is more essential than protecting the people who make it all possible. This unwavering commitment to safety isn't just about risk management. It's about who we are as a company and how we value our people. And that's a nonnegotiable because in Veolia, the how matters as much as the what. You know what powers all those essential services I just described. Well, people, highly committed professionals, 80% of them are blue collars. They are not only our workforce, they are Veolia heart and soul, our ambassadors to millions of customers. Their dedication drive us to go further. Through the Veolia Cares program, we are setting new standards in employee support. Wherever we operate, we ensure every employee has access to comprehensive social benefits. Through our commitment to equal opportunities for all with concrete results, such as reaching, for example, 32% of women representation in our group management committee who head up our GreenUp objectives and by being a proud signatory of the ILO Global Business and Disability Charter. Through massive investments in our people's development by nearly doubling the number of training hours, 30 per employee annually. Because this isn't just about skills, it's about empowering every individual to grow and thrive within Veolia and through a genuine and high-end social dialogue with all our geographies. And the vitality of this dialogue is reflected in our ability to conduct ongoing discussions with staff representative and to negotiate and sign a large number of collective agreements each year. So, yes, we are proud to see the results of these ambitious HR policies reflected in our annual engagement survey, Estelle just mentioned. This is what defines Veolia. In a world of increasing complexity and uncertainty, our success isn't just built on infrastructure and technology, it's built on people, people who believe in our mission, people who deliver excellence every day, people who make the essential possible. That's the true measure of our performance, and that's what makes Veolia's future so promising.

Thank you, Isabelle. Just a few words of conclusion. By all this illustration, which has been presented to you in the last half an hour, you see that everything is really intertwined in Veolia. Everything we do in terms of our employees, our customers, the planet, everything is embedded in Veolia's business and DNA. And that's why multifaceted performance is really the way of measurement of our success. If we hadn't been via super-engaged workforce, our financial result wouldn't be the same, not only now, but in the years to come. Same goes with our customer satisfaction, of course. And same goes with everything we measure in terms of our performance to save water or to remove pollutant because it is Veolia's business to ensure that this is successful, not only in '24, as we've seen in the result, but in the years to come. So really, our mission is to reconcile performance with human progress on environmental protection and is really what we do on a daily basis. Thank you very much. And now we are ready to take your questions if you may have so. And I'm sure you will.

We will start with the questions over the phone. Operator, I will give you the floor, and then, we'll take the...

[Operator Instructions]

I will then start with the written question. It was sent over the Internet. This is a question from Philippe Ourpatian. Are you concerned or obliged to sign the new DEI rules that Trump administration is implementing?

Probably for you, Isabelle.

Yes, sure. So we haven't received this letter, and more importantly, we are far removed from these considerations. I'll tell you why. Veolia does not and has never practiced affirmative action. Our HR policy is, as I mentioned earlier, and has always been built on the fundamental principle of clear, equal opportunity policy based solely on skills without any form of discrimination, whether positive or negative. Our only criterion is professional merit, is talent, period. This is a historical and nonnegotiable line of conduct in our group, so our ambition is to build teams that naturally reflect the diversity of the territories and the customers that we serve every day.

Thank you. We have another question from the Internet from Andrew Mulder. Do you intend to issue SLB, Sustainability linked bonds as well as Green Bonds?

Emmanuelle?

Yes. Thank you, Andrew, for you question. We were happy to have developed this state of the art green financing framework, thanks to the work of the team, where every euro, which are going -- which is going to be raised, will be directed to investment, which are fully eligible with the EU taxonomy. For us, it's a way to show our intent to finance through green financing instruments our purpose in ecological transformation. Regarding SLB format, yes, we have considered it, and it's an option. So we may consider expanding our green finance framework in the future to all of us for the insurance of SLB.

Now we have a question on the phone, I think. Operator, I'll give the floor to you.

Now we're going to take our first question on audio line. Just give us a moment. And the question comes from the line of Wanda Serwinowska.

I have just 1 question. Because you -- Veolia does a lot on the sustainability circular economy and you are a global player, is there any regulation, any change in the policies that we should focus more, we should track more closely, which can basically provide a positive catalyst for Veolia business going forward? And can you also talk about the U.S.? Is the Trump presidency putting a stop on your growth in the U.S.?

I'm going to take this one. If I understood well, because the line was not super, super good, so hopefully, I will have understood your question. So what are the catalysts and the regulation, which can help developing Veolia's business, as I understand, and what about the U.S. presidency on that -- the environmental front? I guess the first -- if I come back to how do we develop our business in Veolia. Yes, regulation is one lever, of course, if there is no regulation and you can throw away everything into -- I don't know, into the sea and all pollutant in the world, you can imagine that you know we don't have a hazards waste business and so on and so forth. So legislation is key. So is the implementation of the legislation. So there are countries where the legislation does exist, but it's not implemented. And usually, we don't have business in those countries. So that's 1 lever. Another one, which we don't use, but on purpose I'm mentioning it, would be specific subsidies. Veolia doesn't rely on subsidies, national subsidies in France, in EU, in the U.S., so we don't have IRA subsidy, we don't have like a green -- the green deal subsidies or anything like that in Veolia. But there is a third lever, which is super important, which is the population as well as industries pushing for our solution. Population is a big lever for growth for us, and I would call them a lie. Let me give you an example. Whatever you voted for in -- or whoever you voted for in November, when you open your tap, you don't want that there is pollutants such as PFAS, which could be harming your health and that of your kids. And that's really transpartisan politically speaking. And that we see in pretty much all the country we operate. Therefore, the population is pushing for deep pollution or decontamination type of solution such as the Beyond PFAS offer, which has taken off super, super rapidly. Another lever is just a license to operate for industries. When you are operating a lithium mine or a semiconductor factory or even a data center, you absolutely desperately need water; otherwise, you just cannot operate your plant. So that becomes a license to operate, to have access to water, either directly or via everything we do to recycle water and save fresh water to be taken from nature. So in a way, population as well as license to operate for industries are -- is a very powerful lever in the same way as regulation is. And I think everything I said does answer to your U.S. small-based question. In the U.S. I'm very confident that we will go on growing very fast our business, and it's one of our growth boosters in Veolia. And how is that so? The underlying pushing trends are: one, health and the environment, the pollutant removal. The other one will be the license to operate associated with strategic industries restoring, typically pharmaceutical, semiconductors or even data centers, and those are very, very powerful levers for us growing our business in the U.S.

If I may have just one -- have a one follow-up. Compared to the GreenUp Plan that you put over 1 year ago, what surprised you on the positive side? Which businesses have grown faster than you anticipated? And which businesses are growing less faster than you anticipated?

That's an interesting question. So what surprised us from -- so you're right, we launched the GreenUp strategic plan a year ago. The first year was a very big success with all the strategic choices bearing already fruits. 6.6% growth of our growth booster was a very good achievement for the first year. So it's 2 or 3 times faster than the rest of the group. So what surprised us? A lot of things because the world in '24 was not exactly a smooth, easy, natural for growing everywhere in the world. But the good news for Veolia is we have strong foundations, such as multifaceted performance on our purpose as well as an agility to react quickly and strongly to whatever happens. So let me give you an example. 2 years ago, we were selling a lot of pieces of equipment and technologies to produce ultrapure water for microelectronics. The main sources of those projects were in Southeast Asia. And then the chip tax comes into place in the U.S. And you know what? The project pipeline dried up very quickly in Southeast Asia, but opened up super quickly as well in the U.S. So we moved from one to the other. So we are constantly chasing for opportunities to be able to deliver on our strategic plan. The -- where exactly will be like very, very dependent from the macro here and the opportunities there, but we are able to react very quickly. Just in my example, I think the fact that Veolia is environmental services leader, present in 44 countries, and each time, we are on the top 3 of each country/activity. So we are a very international company, which helps us dealing with, again, chasing opportunities when they arise.

Now we have many questions on the Internet. I will start with a question from Arthur Sitbon. Could you provide some detail on your project CapEx track record in energy projects? In Eastern Europe, and for us waste plans, have you delivered on time so far?

So just on the first question, I will have Emmanuelle elaborate on the -- not necessarily the CapEx, on the entire energy project, but the webinar today is on like the exiting coal and methane, so maybe you could elaborate on that, Emmanuelle, and it has good return. That's -- I don't want to spoil it. So that's very good as well for our business. But I would encourage you, Mr. Sitbon, to come to in November. We have a specific session, which will be in -- located in Poznan in Poland, on our energy business and exiting coal, all in one, November, so I want for you to join. Emmanuelle?

Yes. Thank you, Estelle. And thank you for your question, Arthur. We are very satisfied with the investment and the delivery of our coal exit investment. As mentioned, from the EUR 1.6 billion investment plan, we already invest EUR 656 million. And for us, all the projects, which have been delivered so far; Braunschweig in Germany, Prerov and Kolin in Czech Republic and Poznan, which will start this year, we are on time and on budget. The IRR, as mentioned, is very good, double-digit IRR, above 10% for each of the projects. And if I may, I will add 2 elements. We are very proud to be able to deliver that because it's super complex projects. You have, at the same time, to deliver massive investment and continue to deliver district heating to the population, meaning that you have to phase. So on top of complex projects, it's become very complex. The team has been amazing, for instance, delivering in Poland on budget when you see a lot of projects in the country, which are above their initial budget. And it was the same in Czech Republic, the team has been able to prove or to demonstrate its creativity and its ability. For instance, in Prerov, during the construction phase, they have seen in the design possibility to increase the IRR to mixing RDF, biomass and sometimes gas. With the same amount of investment and to be able to deliver that on time, on budget and give more flexibility regarding the source or the input. So very happy regarding that. And it's the same with our methane capture. EUR 85 million CapEx investment, we are on time, on budget and very happy on the consequences with the increase of the methane capture rate.

So maybe, Emmanuelle, if you could say how with this miracle, because I'm asked this question very often, that we have a double-digit IRR on coal exit. I've been asked a lot of time. So it's not online today, but I'm sure everybody will be interested to hear about that.

Absolutely. You're right, Estelle. So where -- from what is coming this very good IRR. It's coming from several elements. The first one is you have less cost because you have less CO2 quota. That is dramatically diminishing. The second one is the additional efficiency. It's new plants, so the efficiency of the plant is higher. The third element is subsidies for the new production that you have after the go live, you receive subsidies. And the third (sic) [ fourth ] element is that the new turbine are generating more electricity than coal-fired boilers. And with this mix of these 4 elements, you get the IRR we just mentioned.

Which I think is another testimony when we say we're exiting coal. Of course, that's good for CO2, but that's good for our bottom line as well. So when I say everything is intertwined in Veolia, that's a very good example. In terms of the question on energy, if your question was overall on energy and CapEx and all the rest, we've published during the last few weeks with the annual result presentation, slide in the appendix, Page 40 or 42, if I remember well, where you have, over the last 3 years, the revenue and EBITDA of every single of our various businesses. And you will see that the EBITDA of energy in '24 is higher than that of pre-war in Ukraine. So we are really ramping up the performances here. In terms of your second part of the question on the hazardous waste business, we are building 5 new facilities as we speak. We'll start very soon and open one in the Middle East. And then there were one in Germany, and then, there were one in the U.S. and so on and so forth. So typically, those are projects which are CapEx intensive, which takes years with a lot assets to be implemented. And then you have 2 years of ramping up. But then, it's very profitable and makes us quite unique when we own them. So typically it's, what, 1 or 2 years of planning and permitting, 3, 4 years of construction and then 1, 2 years of ramping up to get to the full results. The good news is, today, we are kind of at the bottom point, therefore, in the hazardous waste ROCE because we are invested, we haven't finished yet, but we are 3/4 of the way of investments and the ramping up will be in the next few years, and that will contribute to our EBITDA targets of the GreenUp plan. And I think we've answered your question. The next one maybe...

Now that we are on waste, we have a question on recycling. And on plastic, from Arnaud Palliez, who is asking about the fact that some plastics are difficult to recycle. Are you spending a lot on R&D to expand the range of plastics that can be recycled? Or would you be looking for new expertise through acquisitions?

So on plastic, we are already, as far as I know, the largest plastic recycler in the world with 35 -- I should check my figures, but 35 facilities across the globe in many, many geographies. All type of plastic, PET, PT, PE. You have a lot of different type of resins from hard plastics, typically for the bumpers in your car through to a plastic bottle, which is PET. So are we investing in finding new things we can recycle? Yes. We don't need to acquire anything. We are really good at that. But I guess the priority is not even to find new ways of things to be recycled because very often, we have the technology to recycle things, but there is no business model for it. So I guess if I had to set one priority, that would be to incentivize the various government and public bodies to be more consistent with their messaging through plastic recycling. And there is a big thing on PET in Europe for instance with 2025 and 2030 targets of -- for bottlers to have a minimum of 30% this year and 50% in 2030 of content, which is recycled. If it stays this way, then it will drive a lot of companies to go on investing and developing this. If it were not, then there will be probably a backlash in terms of plastic recycling. So it's not necessarily only legislation as such, it is a messaging in a consistent way, which will be very key. So I guess this is more that rather than purely technical obstacles, which prevents us from doing more plastic recycling.

Let's change subjects. Now we have a question associated with our purpose. We -- I note that you have a purpose committee at the Board level, could Veolia consider becoming a purpose mission as per the French PACTE Law? And if not, why not given you already have eyes on it?

Good question, which was discussed at the Board, as you can imagine, over the last few years. Veolia was one of the first company to seize the opportunity of the law PACTE to actually put -- to define ambition or purpose of the organization, what we call the [indiscernible], which is clear. And I think we are very unique in that everything we've said for the last 1 hour translate into real figures and real measurement for 16,000 employees in terms of variable pay. So it's not only our top layer, but it's really embedded and diffused. So the Board has decided against going for société à mission, which is a very specific or BCorp, let's say, status. But there is a proposal, which will be submitted at the next AGM in April to include the text of the purpose within the status of the company, which will be a big plus in terms of signaling the importance of our purpose for the entirety of the organization. That will be submitted to the next AGM, so to all shareholder base.

Thank you. We now head back to energy. We have a question on biomass. Can you share your plans regarding the introduction of biomass as an alternative to coal in your CHP, combined heat and power, facilities? Do you anticipate any significant barrier or challenges to this implementation?

Maybe for you, Emmanuelle?

Yes. Thank you for your question. Few elements of answers. The first one is that biomass is one of the elements allowing us to do the coal exit in Europe, but it's only -- not the only one. It is complete, as you have seen, by RDF, by multi-fuel boiler and a lot of technologies. Second element of answers for us, the strategy we have implemented for the group is to have a sustainable management of our biomass sourcing. 100% of the biomass, we are using, is traceable and more -- way more than 75% is defined as sustainable. We do not use agricultural biomass, but forest biomass. And for that, we have a long-term strategy with partnership with [ Forest Garden ], with furniture company and all the partners, which are important on this market. One element also, which is important for us, you may have seen, for instance, in Braunschweig in Germany that we are not using rest of -- residue of food, but we are using waste food. Thanks to the combination of our business, we have -- because in Germany, we have waste activity and energy activity, we are the second waste player in the market. We have been able to source waste food, which is used in our Braunschweig facilities, so showing the capability and plus generating by the combination. So to answer your question, long-term vision, partnership to secure our biomass supply.

So -- and it is waste biomass in other words, as opposed to virgin biomass in Europe. And that's absolutely key. And I think what's important in what Emmanuelle has said is like we talk a lot about the synergies between our various businesses in Veolia, what I call the, combination. This is a good example. The RDF, so nonreciprocal waste or the waste food, as Emmanuelle mentioned, is an activity, which is driven by the waste part of our business and feeding the energy part of our business with alternative fuel.

Thank you. We have a question about employees and share program for the employees. Will you -- do you intend to continue to offer share plans for the employees in the coming years? And in particular, in 2025, and will you set up -- this is another question, but it's related, a share buyback program in 2025 corresponding to this employee program?

So maybe Isabelle for the first part and Emmanuelle for the second.

Yes.

Yes. So the answer is definitely yes. We intend to have -- so far, we had plans every year, right? So we intend to move on with this habit. Actually, the 2025 plan is on its way. So we are about to communicate to our employees. And just for the record, we will have probably 54 countries covered with the plan, so pretty much all of our countries. We have so far a little more than 160,000 people who have subscribed to one of our plans.

As for the second part, Emmanuelle.

Yes. Regarding the second part of your question, you're right, 5 years ago, Estelle and the management has decided to launch this employee share plan because it was important for the group to have an alignment between the interest of the employee and the manager. Our strategic vision is clear. We want to have nonemployee shareholding around 10%, and we were at the end of 2024 around 9%. With the very strong result of GreenUp and the solidity of our balance sheet, we have decided to launch a share buyback program only dedicated to this employee share plan. It will start in 2025 until the end of GreenUp, 2027. With this strong management decision, because it's a first for Veolia, we are raising the ambition of GreenUp, expecting not only an increase of our net result of 10%, but also of our EPS.

We -- you already addressed the subject, but there's a complementary question associated with our U.S. water activities and the consequence that the Trump administration removing government agencies could impact -- could have an impact on our U.S. business, and in particular, in water, of course, PFAS, water regeneration or hazardous waste. This is a question from Philippe Ourpatian.

I guess, elaborating a little bit on what I said earlier on. Just to take the example of PFAS, first things first, who did launch the first PFAS legislation? Actually, it was Trump 1 administration. So I think it speaks for itself. Second, PFAS, you might think of PFAS in water, and therefore, all the legislation in the drinking water, which so far, nobody has announced that it will be changed or removed. The question would be more the dates of the implementation rather than the if. But there is PFAS as well in other places, just underneath every single air base and airport in the world pretty much. So you can think of the PFAS opportunity as more global than that, global than just drinking water. And as far as you know, like the other legislations are concerned, again, when I mentioned pollutant removal as well as license to operate for strategic industries, it doesn't depend on an EPA, like legislation really. It's more license to operate or earn it from the population. So no specific things that we have spotted yet, which could go against our very big ambition of growth in the U.S.

Thank you. We have now a more technical question, associated with carbon capture. Do you have already developed any carbon capture technology that could be used in, for instance, for your incinerator of solid waste? Or where are you in this -- on this front?

Could I start, and you may complement, Emmanuelle?

Yes.

I guess, carbon capture and storage is not really what Veolia wants to develop because there are a lot of other players who can be a little bit more relevant than Veolia on that one. But what we want to develop, and this is within our roadmap for innovation, is carbon capture and usage. So in a way the circular economy of carbon typically to produce sustainable aviation fuel, to produce methanol or any other type of produce from the capturing of carbon. We are far from having it already, I guess, ready to be implemented. So it's really innovation. But we are testing a few things here. Another one will be storage into rocks, which is another type of technology. So very specific, but no storage into underground ex-oil and underground layers. So we are trying all that. We have a portfolio of innovation, and as innovation, some of them will work, some of them won't work this way, but we'll tweak it a little bit to make it work. And some others, we may think, well, there is no business for those, so let's see for later. And we've tried already quite a lot. In terms of incineration specifically, yes, we have a few of the projects I mentioned on SAF and methanol, which are specifically potentially connected to incineration units having in mind that incinerations, the CO2 associated, we can reduce, as Emmanuelle has mentioned by removing plastic from it. Because if I become a little bit more subtle, you have the good and the bad carbon. It's a bit like cholesterol. So you have the biogenic carbon, this is good CO2, and you have the non-biogenic carbon, which is the bad CO2. So what we're trying and doing to enhance the biogenic content within the CO2, the incineration units may produce as well, and then, to potentially recycle it. Anything you want to add, Emmanuelle?

Yes, maybe one word. So you're absolutely right. We are starting on this -- on CCU and a few elements we could share also with you. The first one is that we have already implemented one CCU in India with our partner, which is Tata Steel. It's in operation. And today, we are able to capture 5 tonnes per day directly from the blast furnace. It's the starting point because in terms of prioritization for our incinerator, we have decided to prioritize energy efficiencies and also to reduce the carbon intensity of the input because we think that it will have higher impact, but for our clients, of course, we want to have the most extensive portfolio, and it's one of the technology we can offer to them. For instance, currently, we are discussing in U.K. with -- for a contract with [ Masterwood ], where we have -- we are implementing a pilot, so starting point. We are looking at it, and today, prioritizing what could have more impact.

Thank you. We now have a question associated with -- we have -- I'm sorry, we have a question associated with climate and biodiversity. Is Veolia looking to develop solutions on wastewater treatment plant to mine natural fertilizers for the agricultural sector in order to reduce the use of fossil fertilizers?

Sebastien?

Yes, of course, good question. We are testing some innovative solution in order, of course, to develop fertilizer coming from wastewater activities. We are working on a topic in Europe. And if the innovation will be good, we'll deploy after this activity in the group.

And we do already quite a lot in terms of producing organic fertilizer from wastewater sludge. Of course, once the sludge is treated so that you don't have any pollutant, in Chile, in France, in the U.K. and in elsewhere. So organic recycling is recycling of the organic content and producing fertilizer. It's already something we do. So Sebastien is ambitious that we can do more on innovative stuff, but we do already quite a lot. When you visit a wastewater treatment plant in Chile in Veolia, they don't call it a wastewater treatment plant, the managers locally. They call it biorefinery. I think it speaks for itself.

We have a question from François-Xavier associated with methane capture. Similarly to coal exit in Central and Eastern Europe, have you been able to generate revenues, which can be associated to your investments in methane capture? Any internal rate of returns that you want to share on methane capture?

So yes, biogas, because biogas is methane plus other stuff. Biogas, we produce basically in wastewater treatment plant, hence, the biorefinery comment, which was producing fertilizer and biogas as well as landfill. So do we already have money coming from the selling of this biogas? The answer is, and it's good return. And we want to develop it more. As you may have seen in the 3 growth boosters of Veolia, we have one called bioenergy. And in bioenergy, typically, biogas, and we've set objective, I will encourage you to come back to our deep dive on energy in January [ 2026 ]. You will see we have objective in terawatt-hour because it's energy. Therefore, we call it into terawatt-hour of biogas. And basically, we want to double this. And this is good money. Do we have an IRR? Not so sure we've done the IRR worldwide on biogas. Do you have it Emmanuelle?

You're absolutely right. So we are generating more than 6 terawatt biogas that we are producing on our more than 150 sites. And the IRR is absolutely in line with the group expectation, which is 1 plus 4. So very happy with the project.

Thank you. We have another question coming associated with nature-based solutions or green infrastructure. And the question is, to what extent Veolia -- this nature-based solution can support our strategy at Veolia of ecological transformation? And could it be a business case for Veolia, nature based solution?

Yes, sure. I'm coming back, and then, Sebastien will answer this question. Biogas, I think you know, not talking about agriculture, but other type of biogas, we may -- probably are the #1 in Europe now of biogas producers just to give you an idea of the scale. On solution based on nature, Sebastien.

Yes, we have some nature-based solutions in the group. In Spain, in Chile or in the South of France, of course, it could be an opportunity for the group and as well a solution in order to tackle some challenges for water, for example. I spoke before about what we are doing in Alicante in Spain. And, of course, the idea is to develop this activity. It is also depending regarding the evolution of the regulation with municipal authorities, and we are working on it. In Europe, but also in South America and in the U.S., and we want to develop a nature-based solution for the group and for the climate and water challenges.

And it's fair to say that, again, the question is not that we don't have the -- some nature-based solution that could be deployed more, the question is a business model associated to it that you can -- of course, Veolia is not an NGO. We have to do business. So if you know the solution, Sebastien just mentioned, you want them not 2, 3, but 10, 50, 100. There needs to be some euros at none point put into the system, which is not the case yet, except for those exceptions that Sebastien just mentioned.

There's still a couple of questions -- a couple of written questions. There's one which has already been addressed, but I think it's important, so I'm going to ask it again. What's the target for employee shareholder percentage for the company?

Yes. Well, we did disclose the target in URD this year, so we have a target of 10%. So as you know, as Estelle mentioned, the employees are already the largest shareholder in Veolia, but we do aim for 10%, which hopefully we will reach in the coming years.

And we will compensate for the dilution of the employee shareholder starting from this year and until the GreenUp -- the end of the GreenUp plant. That's what we've announced. That was the new announcement of earlier in February.

Thank you. I think we don't have any more questions from the call and not anymore from the Internet. So maybe we can wait a couple of minutes, but so far, I think we've answered everything.

I guess, I can see one popping up, which is how can Veolia encourage other leaders to accelerate actions towards the ecological transition and everything you have been saying. And that's a good transition for my conclusion word. For those who can think you know you have a business and money on the one side and the other top of agenda on the other, Veolia is demonstrating that you can have the 2 going alongside, employees success and commitment delivering good results. Customer would be happy delivering good results. And saving water, removing pollutants and reducing CO2 is a good business, and that's exactly what Veolia's business is about. Thank you very much.